Japanese Authorities Crack Down on Crypto Exchanges with Weak Anti-Money Laundering Policies

Japanese Authorities Crack Down on Crypto Exchanges with Weak Anti-Money Laundering Policies

Japan’s Financial Services Agency is cracking down on cryptocurrency exchanges in the country, reports the Nikkei Asian Review. The crackdowns are taking place against those exchanges which have provisions for anonymous transactions or have a weak identity verification process.

This stepping up of actions is said to be
a preparation for an inspection by the Financial Action Task Force, this fall.
The steps are not only aimed towards crypto exchanges but also at banks and
other traditional financial institutions which offer financial services with less
stringent identity verification measures.

The Global Risk Perception and Regulation
Drive

The cryptocurrencies have been found to
offer a lot of convenience to its users as a financial tool, as a means of
exchange, and even as a store of value. However, it is also thought to pose
threats to financial and economic orders, along with the danger of being used
as a source of terror funding and illegitimate arms, like in the North
Korean case, and thus a threat to global peace.

Therefore, ahead of the G-20 summit, Japan
wants to ensure that its anti-money laundering laws are in place, and are well
implemented in case of crypto exchanges, says the Asian Review report.

The Present Regulations in Japan

The last Financial Action Task Force
report had singled out Japan in terms of having an inadequate legal framework
in 2008. In October 2018, the Anti Money Laundering laws of Financial Action
Task Force included cryptocurrencies. In June 2018, the Financial Services
Agency had issued business improvement orders to crypto exchanges for improving
their identity verification system. This was seen as a response to the hacking
attack worth 54 billion Yen on Coincheck.
The Japanese
authorities seem to be feeling the need for complying with the global standards
of anti-money laundering laws for cryptocurrencies. In fact, the global
standardization of such norms is becoming a necessity to even the distribution
of the crypto sector developments around the world.

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I am a content writer with interests in life sciences and blockchain. I believe that blockchain has the potential to transform every aspect of human endeavor. I love surfing the internet, reading, learning new things, and trying new cuisines.